Used car prices still rising
Retailers have been urged to resist price reductions after average prices for used cars rose by 8.1% in December compared to the same month in 2019.
According to the Auto Trader Retail Price Index, which is based on daily pricing analysis of circa 900,000 vehicles, the average price of a used car in December was £14,085, an increase of 8.1% on 2019 figures.
It marked the ninth consecutive month of growth and caps what has been a very strong year for second-hand car prices, which in total increased four per cent year on year. Prices have been driven by both supply constraints in the market, and the strong levels of consumer demand.
Director of data and insight, Richard Walker, said: “Encouragingly, we can see that the tighter restrictions rolled out across the UK throughout December had little impact on the levels of consumer demand. Whilst sales capabilities were limited to click and collect and home delivery, we saw millions of consumers visiting our marketplace and engaging with our retailer partners, which suggests there was a healthy market available. Early signs suggest that January consumer demand will remain robust, despite the recent increase in restrictions.
“Consumer demand, along with constrained supply, is sustaining price growth, so, far from requiring a big correction in pricing, with such strong engagement we have every reason for optimism that prices will remain strong in quarter one. As with the previous lockdowns, we strongly urge retailers to trust the data and continue to hold firm with their prices, which as we saw throughout 2020 helped ensure retailers achieved much stronger margins than if prices were adjusted unnecessarily.”
